Computerscope Covers Irish Hosting Business

The latest Computerscope magazine had an article, written by John Collins, on the Irish hosting scene. The article was interesting because it had a quote from the CIO of BT Ireland, Martin Wickham, about the Irish hosting market being a “fragmented and dysfunctional market with a lot of offerings around pure space rental.” This quote seems to demonstrate the lack of situational awareness common in ISP management.

The Irish hosting market is far from a dysfunctional market. Though without accurate data, the Irish market can seem to be fragmented and dysfunctional especially if you rely on dubious information sources such as webhosting.info etc. The real battle in the Irish hosting business is for the high value .ie clients. And it is a battle in which BT Ireland, like other ISPs continues to lose ground.

As with any market where the barrier to entry is low, the lower end of the market is always going to appear highly fragmented. But at the top of the market, it takes on a very structured form. The top Irish hosters account for over 54% of the Irish market. The ISPs are losing market share because these HSPs can provide a highly automated and very efficient service. And in a ruthlessly efficient market, only the fittest survive.

The Computerscope article showed a good understanding of the Irish hosting situation. I don’t think that the Irish web hosting service providers (HSPs) would like to be referred to as “indie hosters” especially when some of them have more clients hosted than many ISPs.

Just looking at BT Ireland’s domain counts from December 2000 to December 2005, (part of a report on the history of the Irish Hosting Business that will be published next week) it is easy to see why ISPs continue lose market share to HSPs. The HSPs are small and often very efficiently run operations where the business owner has everything on the line. The ISP management just don’t have that kind of dedication. And in a service driven industry, that can prove fatal.

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Written by John McCormac on December 17th, 2005 with comments disabled.
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5 comments

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Get your own gravatar by visiting gravatar.com John McCormac
#1. December 17th, 2005, at 11:00 AM.

Yep Michele but John Collins didn’t seem to appreciate the magnitude of the shift away from the ISPs over the last few years. The term “indie hosters” sounds a bit like any hoster that is not an ISP is a ramshackle operation whereas the opposite is often true.

Get your own gravatar by visiting gravatar.com john collins
#2. December 19th, 2005, at 11:50 AM.

John, glad you though the piece “showed a good understanding of the Irish hosting situation”. Just to expand on the BT angle - both Martin Wickham and Maurice Mortell from Data Electronics showed little interest in hosting for small and mid range customers, which as you know is where the volume is. As your data shows it’s a hard market for them to play in - it’s price sensitive and very dynamic - not something the larger players like.
On the indie thing, I assure you it was never meant to sound derogatory. Perhaps i’m displaying my roots as a music journalist in the early 90s where indie was a badge of honour. Really what I’m trying to do with the term is differentiate from the telco operations.

Get your own gravatar by visiting gravatar.com John McCormac
#3. December 19th, 2005, at 12:32 PM.

John, it was a good article. The market really has shifted away from ISPs over the last few years and now the HSPs are eating into areas that the ISPs thought were safe. The dedicated/colo market is being taken away from the ISPs and this is going to continue. There is a breakpoint at around 2600 domains hosted where a player either sticks to being a web developer that offers hosting or makes the jump to being a more pureplay Hosting Service Provider. When they make the jump, they typically start offering the dedicated/colo services that once were the preserve of the ISPs.

The ISP management over the past few years has been a factor in their loss of marketshare. They had no plan in place to counter the loss of clients to the HSPs and they had been relying on their own, limited, data. That’s the limited data I was referring to. The ISPs had no proper overview of the Irish hosting business. The HSPs have been able to take clients because they are highly automated and efficient operations - unlike BTi or Eircom. They also seem to be more aware of the market than the ISPs.

Hosting, at the lower end of the market, has become an impulse purchase. If a punter wants to get hosting or register a domain then it can be done quickly and efficiently online. With the ISPs, it involves sales calls and quotations. The internet generation has gotten used to having things done in minutes so the ISPs continue to lose these potential new customers to the HSPs.

The ironic thing about the “indie” label for HSPs is that the the ISPs only have 22.78% of the market now. The top Irish HSPs have 54.7% of the market. (Dec2005 figures) The HSPs are distinctly mainstream. The terminology is not set in stone yet but the best way at the moment is to still think in terms of ISPs and HSPs. Though the Application Service Providers (ASPs) are beginning to make an entrance, the market is still split between HSPs/ISPs and webdevelopers.

Get your own gravatar by visiting gravatar.com Steve
#4. December 20th, 2005, at 9:09 AM.

Hi John (Collins)

I dont mind you calling us indie hosters (www.hosting365.ie) but we do own a 25,000 square foot data centre in west Dublin, host more websites than anyone else in Ireland, have 28 staff and host companies like Bank of Scotland, RTE, IIB, The Irish Stock Exchange and more, so saying we are not in the enterprise space is misleading :)